I’ve published a book with the full text of House version of The American Health Care Act of 2017 (H.R. 1628), along with the Senate’s proposed Better Care Reconciliation Act. It includes my introduction and commentary on key implications.

In the debate around the health care law, it’s unclear how (or how soon) Congress will make modifications to resolve all their differences. Until then, we should all get informed on the most important proposed changes that would affect us.

Repeal of “individual mandate” penalty on those without “adequate” health insurance coverage

The Obamacare legislation imposed the so-called individual mandate, which is really a tax penalty on individuals and families without government-approved health insurance coverage. The penalty was phased in over several years. For 2017, the penalty is generally the greater of: (1) $695 for each uninsured household member ($347.50 for members under 18), subject to a maximum of $2,085 or (2) 2.5% of your income in excess of the applicable 2017 federal income tax return filing threshold, which depends on your filing status.

Repeal of premium tax credit and replacement with new tax credit regime

The Obamacare legislation established the so-called premium tax credit (PTC) to help lower- and middle-income folks pay for their Obamacare health insurance premiums. The PTC is basically a health insurance subsidy that is laundered through the federal income tax system.

Effective in 2020, the AHCA would repeal the existing PTC and replace it with a new health insurance coverage credit. This would be another subsidy laundered through the tax system. The new credit would be calculated monthly, based on the taxpayer’s qualified coverage in effect for that month. At this point, it’s not worth going into further detail on this — because if anything is sure to be substantially changed by the Senate, it is the new health insurance credit regime.

Repeal effective date: As stated, the existing PTC would be replaced by the new health insurance coverage credit in 2020.

Repeal of additional 0.9% Medicare tax on salaries and self-employment income earned by people who earn over a certain amount

Before Obamacare, the Medicare tax on salary and/or self-employment (SE) income was a flat 2.9%. If you are an employee, 1.45% was withheld from your paychecks, and the other 1.45% was paid by your employer. If you are self-employed, you paid the whole 2.9% yourself.

The Obamacare legislation imposed an extra 0.9% Medicare tax charged on: (1) salary and/or SE income above $200,000 for an unmarried individual, (2) combined salary and/or SE income above $250,000 for a married joint-filing couple, and (3) salary and/or SE income above $125,000 for those who use married filing separate status. For self-employed individuals, the additional 0.9% Medicare tax hit comes in the form of a higher SE bill.

Repeal of 3.8% Medicare surtax on investment income on people who make over a certain amount

Before Obamacare, investment income was not subject to any sort of Medicare tax. The Obamacare legislation imposed a 3.8% Medicare surtax on all or part of your net investment income, including long-term capital gains and dividends. Therefore, under the current rules, the maximum federal rate on long-term gains and qualified dividends is actually 23.8% (20% for the “regular” capital-gains tax plus 3.8% for the net investment income tax) versus the advertised 20% maximum rate.

The 3.8% surtax does not hit you unless your adjusted gross income (AGI) exceeds: (1) $200,000 if you’re unmarried, (2) $250,000 if you’re a married joint-filer, or (3) $125,000 if you use married filing separate status.

If you are affected, the 3.8% surtax applies to the lesser of your net investment income or the amount of AGI in excess of the applicable threshold. For example, a married joint-filing couple with AGI of $325,000 and $100,000 of net investment income would pay the 3.8% surtax on $75,000 (the amount of excess AGI). If the same couple has AGI of $400,000, they would pay the 3.8% surtax on $100,000 (the entire amount of their net investment income).

Repeal effective date: The AHCA would repeal the 3.8% Medicare surtax on net investment income, beginning this year. That’s more like it!

Repeal of cap on health care FSA contributions

Before Obamacare, there was no tax-law limit on annual contributions to your employer’s health care flexible spending account (FSA) plan (although many plans imposed their own limits). Amounts you contribute to a health care FSA are subtracted from your taxable salary. Then you can use the funds to reimburse yourself tax-free to cover qualified medical expenses.

The Obamacare legislation imposed an annual $2,500 cap — with inflation adjustments — on health care FSA contributions for each employee. The inflation-adjusted cap for 2017 is $2,600.

Repeal of increased threshold for itemized medical expense deductions and establishment of new lower threshold

Before Obamacare, you could claim an itemized deduction for medical expenses paid for you, your spouse, and your dependents, to the extent those expenses exceeded 7.5% of your AGI.

The Obamacare legislation raised the deduction threshold to 10% of AGI. This unfavorable change was phased in over several years, depending on your age. Under current law, the 10%-of-AGI deduction threshold applies to taxpayers of all ages for 2017 and beyond.

Repeal effective date: The AHCA would repeal the 10%-of-AGI deduction threshold and establish a new lower threshold of 5.8% of AGI, beginning this year.

Higher deductible contributions to health savings accounts (HSAs)

Starting in 2018, the AHCA would increase the maximum annual contribution amounts to tax-smart health savings accounts (HSAs). HSA contributions are deductible for federal income tax purposes. You can then take tax-free HSA withdrawals to reimburse yourself for qualified medical expenses. Under current law, the maximum HSA contribution for 2017 is $3,400 for self-only coverage and $6,750 for family coverage (anything other than self-only coverage).

The AHCA would greatly increase the maximum annual deductible contribution amounts, starting in 2018. Next year, the maximums would be $6,650 for self-only coverage and $13,300 for family coverage. The maximums for later years would be increased for inflation. Maximum contribution amounts are increased by $1,000 for HSA owners who are age 55 or older. For a primer on how HSAs work under the existing rules, see Obamacare may be making health savings accounts more popular.